Mercedes, Porsche hometown braces for ban on diesel cars

The hometown of Mercedes-Benz and Porsche is bracing for a ban on diesel cars starting as soon as January 1.

A judge in Stuttgart, Germany, ruled on Friday that the city may have to ban or severely limit diesel cars to bring down pollution and meet air quality standards.

The ruling was triggered by a lawsuit filed by Environmental Action Germany and ClientEarth. They have filed similar suits in cities across Germany, calling for diesel car bans.

Judge Wolfgang Kern found that Stuttgart's current clean air plan was insufficient. He said in court that "the protection of health has to be regarded as more important than the right to property and the general freedom of action of the vehicle owners concerned."

The German state of Baden-Württemberg is expected to appeal the ruling to the country's highest court.

"The judge has clarified that a diesel ban is unavoidable. Stuttgart's authorities must now find rapid and effective ways to solve the region's air quality issues," said Ugo Taddei, a lawyer at ClientEarth.

The fallout from Volkswagen's "dieselgate" scandal continues. Porsche, part of the Volkswagen(VLKAY) group, has just been ordered to recall tens of thousands of diesel SUVs after German officials said they were equipped with an "unauthorized defeat device" allegedly used to cheat emissions testing.

Daimler(DMLRY), the firm that makes Mercedes-Benz cars, announced a voluntary recall earlier this month of more than 3 million diesel vehicles in Europe.

Stuttgart is a city of 600,000 people and home to a cluster of automotive firms.

The automaker is offering European owners a free service upgrade that would improve emissions. It is also introducing a new diesel engine across its model range.

"The public debate about diesel engines is creating uncertainty," CEO Dieter Zetsche said last week. "We have therefore decided on additional measures to reassure drivers of diesel cars and to strengthen confidence in diesel technology."

Daimler told CNNMoney on Friday it believes a ban on diesel cars is a bad idea because it would hurt the economy, trade and commuters.

"In our view there are other measures that could contribute more easily, effectively and faster to the reduction of particulate matter and nitrogen oxides," the company said in a statement.